Horizontal Direct Effect
Introduction
This paper will critically examine the necessity and reasonableness of the rule that directives cannot have horizontal and direct effect. It will do this by first arguing that while the distinction between horizontal and vertical direct effect was at one time considered to be acceptable, the numerous devices[1] created by the ECJ to circumvent the distinction has made the distinction theoretical obsolete. Second this paper will ask if the distinction should be removed, because the devices create problems and blur the distinction.
In Van Duyn v Home Office[2] the ECJ held that Directive can be directly effective if it is sufficiently clear, precisely stated and if it grants an identifiable right upon which individuals can rely on (Van Gend en Loos principle). In Marshall (No 1)[3] the ECJ first held that a person could rely on a Directive against the State. But more importantly, this case limits this by affirming that it only gives rise to vertical direct effect of a directive but certainly not horizontal direct effect.
Over the years this general denial of horizontal direct effect has been whittled down and there have been substantial conceptual inroads into its underlying rationale. First occasion was by the ECJ’s broadening the concept of “emanation of the State”.[4] The effect is that more bodies are caught by the definition of ‘the state’ and are thus subject to direct effect. Second occasion was through the development of the doctrine of indirect effect,[5] also known as “sympathetic interpretation” to consolidate the enforceability of EU Law. In Von Colson, the ECJ avoided the problem of horizontal direct effect of directive, by providing an alternative that permits to bypass this issue. Third, incidental direct effect of Directives was another solution devised by the ECJ to consolidate the lack of horizontal direct effect of Directives and to ensure enforceability.[6] Instead of directly trying to enforce the rights of an individual by invoking a Directive in horizontal disputes, the direct effect of the Directive will rather be used to establish the illegal nature of any related national provision. Resultantly, a private party may rely upon the directive to shield itself from another private party's claim towards which it would otherwise be defenseless.
Considering such inroads in the horizontal/vertical distinction, is it still tenable? It is argued that the final answer must be no. First, “emanation of the state” concept is broad and an artificial concept, because it can have the effect of commercial bodies with mere tangential state associations having Directives enforced against them, while their private sector competitors are immune from such enforcement. Second, the doctrine of indirect effect creates liability problems. As noted by AG Jacobs in Centrosteel v Adipol,[7] the duty of indirect interpretation can result in imposing civil liability which would not have existed. Third, there is conceptual ambiguity in discerning horizontal elements in incidental cases and outright horizontal direct effect. For example direct effect was permitted in CIA[8] and Unilever,[9] but denied in cases like WWF v Bozen.[10] This creates a lot of unpredictability in the when the courts are forced to limit vertical direct effect. Colgan argued by over-focusing on the parties to the dispute rather than the outcome, results in ‘vertical’, like cases such as Dori,[11] which actually burden individuals, effectively reducing the horizontal/vertical distinction to a formalistic vacuity.[12]
Cases like Mangold[13] demonstrate the ECJ’s willingness to create makeshift circumventing devices, where they held that 'general principles of law' could also impose substantive rights and obligations on individuals. The fact that the only justification offered for such an innovative concept was the cases of Rodriguez Caballero,[14] Simmenthal,[15] and Solred.[16] Craig argues all three cases concern vertical direct effect and the former two have nothing to do with general principles.[17] However the ratio of Mangold was confirmed and expanded by the ECJ in Küküvedci,[18] where they said even if the deadline for the directive has not passed, and ‘general principles’ may be still found as a basis for an action. The Mangold reasoning and this recent development further drains the horizontal/vertical direct effect distinction of nearly all meaning.
Examining these inroads into the horizontal/vertical direct effect begs the question what is the purpose of retaining the distinction? The main reason for this principle implying that a Directive cannot be directly effective in a dispute between privates lies on the responsibility of the implementation. Usually, the purpose of vertical direct effect of a Directive is to penalize the Member States for their failure and to compel them to properly implement it. Indeed, the reverse solution would amount to “sanction” a private person for the failure to implement or the default in the implementation attributable to its Member State. However, private persons should not be held accountable for the breaches of the obligations belonging to their Member States. Craig and de Burca call an ‘unusual textual faithfulness’ in focusing on the addressee.[19]
Moreover, recognizing the horizontal direct effect of Directives would amount to affirm that they do not need implementation, in any situations, to be enforced before national Courts. There would be no difference between Directives and Regulations anymore, although Article 288 TFEU clearly points the distinction. In the words of AG Slynn, this would “totally blur the distinction between Directives and regulations established by the Treaty.”[20] Directives in their very nature still leave much ‘to be fleshed out’ and consequently, allowing horizontal direct effect would undermine legal certainty.
In 1994, AG Jacobs correctly concluded that “it might well be conducive to greater legal certainty, and to a more coherent system, if the provisions of a directive were held in appropriate circumstances to be directly enforceable against individuals”.[21] In recent the decision of Kücükdeveci and others it seems the ECJ impliedly, agrees. Considering the continually widening of the availability of horizontal direct effect, one is forced to ask why the ECJ just do not do away with the distinction altogether? This would have the effect of overturning 25 years of mistaken jurisprudence.
Law Books
The EU Law Core Series textbooks are useful for summarising significant cases and ideas that are necessary for establishing a solid legal basis. Students may also use the EU Law Q&A Series, which gives recommended answers to assist them prepare for their examinations.
Bibliography
Books
Craig, P. and De Búrca, G., EU Law: text and materials, (Oxford: Oxford University Press, 2015)
Journals
Colgan, Daniel, ‘Triangular Situations: The Coup de Grâce for the Denial of Horizontal Direct Effect of Community Directives;, (2002) 8(4) European Public Law, 545 – 568
Drake, ‘Twenty years after Von Colson: the impact of “indirect effect” on the protection of the Individual’s Community Rights’, (2005) 30 EL Rev, 329
Footnotes
[1] (i) the expanding concept of emanation of the State, (ii) indirect effect, (iii) incidental horizontal direct effect and (iv) State liability.
[2] 1974 (C-41/74) ECJ
[3] Marshall v Southampton and South West Area Health Authority (No 1) (Case 152/84) [1986] ECR 723
[4] Foster v British Gas plc (Case C-188/89) [1990] ECR I-3313
[5] Von Colson & Kamann v Land Nordrhein-Westfalen (Case 14/83) [1984] ECR 1891, combined with Harz v Deutsche Tradax (Case 79/83) [1984] ECR 1921
[6] CIA Security v Signalson and Securitel (1996) C-194/94
[7] Centrosteel v Adipol (Case 456/98) [2000] ECR I-6007
[8] CIA Security v Signalson and Securitel (1996) C-194/94
[9] Unilever Italia SpA v Central Food (2000) C-443/98
[10] World Wildlife Fund & ors v Autonome Provinz Bozen & ors (C-435/97) [2001] 1 CMLR 149
[11] Dori v Recreb Sri (Case C-91/92) [1994] ECR I-3325
[12] Colgan, Daniel, ‘Triangular Situations: The Coup de Grâce for the Denial of Horizontal Direct Effect of Community Directives;, (2002) 8(4) European Public Law, 545 – 568
[13] Werner Mangold v Rudiger Helm (144/04) [2005] ECJ|
[14] Angel Rodriguez Caballero v. Fondo de Garantía Salarial (Fogasa) Case C-442/00
[15] Simmenthal (106/77) [1978] ECR 629
[16] Solred SA v Administración General del Estado (C-347/96)
[17] Craig, P. and De Búrca, G., EU Law: text and materials, (Oxford: Oxford University Press, 2015)
[18] SedaKücükdeveci v Swedex GmbH and Co, KG (555/07) [2010] ECJ
[19] Craig, P. and De Búrca, G., EU Law: text and materials, (Oxford: Oxford University Press, 2015)
[20] Marshall v Southampton and South West Area Health Authority (No 1) (Case 152/84) [1986] ECR 723
[21] Opinion of Mr Advocate General Jacobs delivered on 27 January 1994. Nicole Vaneetveld v Le Foyer SA and Le Foyer SA v Fédération des Mutualités Socialistes et Syndicales de la Province de Liège Case C-316/93
